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Average net worth per generation

In 2021, the average net worth in an American household aged 64-75 reached over $1.2m [1] Federal Reserve - Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances - Accessed October 2021 https://www.federalreserve.gov/publications/files/scf20.pdf, while the average household under 35 had a net worth of just $76k. With these massive generational wealth gaps, Self decided to dig deeper into the historical wealth distribution of different generations to understand whether the wealth gap has always been so vast.

Contents:

Key findings: 

The generational wealth gap

In the U.S., household wealth has traditionally seen a relatively even distribution across different age groups. However, over the last 30 years, data from the U.S. Federal Reserve [2] The Fed - DFA: Distributional Financial Accounts - Accessed November 2021 https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/#quarter:119;series:Net%20worth;demographic:generation;population:all;units:shares shows that older generations have been amassing wealth at a far greater rate than their younger cohorts.

Generation Birth year % of population in 2021 [3] Census.gov, National Population by Characteristics: 2010-2020 - Accessed November 2021 https://www.census.gov/programs-surveys/popest/technical-documentation/research/evaluation-estimates/2020-evaluation-estimates/2010s-national-detail.html
Silent generation 1928 - 1945 6.33%
Baby boomer 1946 - 1964 21.44%
Generation X  1965 - 1980 19.73%
Millennial 1981 - 1996 21.95%

In 1998, the American population under 40 years old held 13.1% of America’s total wealth. Today, those under 40 hold only 6% of the total wealth. This means that millennials and Generation X own less than half of the wealth that older generations owned when they were the same age.

Year Silent generation Baby Boomers Generation X Millenials
1989 208044.13 59912.11 1477.610167 0
1990 215372.34 61560.89 2099.57289 0
1991 232051.1 69126.48 3212.866786 0
1992 240878.33 78620.5 4778.663307 0
1993 254364.78 87262.58 6486.205044 0
1994 265081.94 93852.56 6101.344553 0
1995 281852.69 111881.17 10219.27134 0
1996 302876.79 124041.31 10902.05223 0
1997 324912.33 144591.84 19022.69837 0
1998 350424.62 170371.54 29113.60756 0
1999 374248.91 197997.23 41269.27606 0
2000 385777.67 215787.21 38931.14439 0
2001 380491.38 228803.01 42742.83672 304.1129035
2002 408341.57 239344.38 32446.32424 905.6795846
2003 450669.41 271308.88 43674.06008 1049.919692
2004 502288.93 315846.42 61312.32372 1489.339901
2005 542700.23 354186.47 77833.99655 3105.322927
2006 569667.24 389650.83 92886.17263 3966.895114
2007 581363.58 413204.72 97989.88493 4679.76096
2008 526801.01 384286.76 62227.5519 7864.035258
2009 534232.06 412547.68 78782.4772 5811.387693
2010 549319.78 445559.87 114222.1739 7539.42893
2011 526481.07 457593.56 122247.3887 8078.114094
2012 559171.92 497325.52 146273.3813 8175.58084
2013 595178.62 547469.79 200697.4205 18402.1911
2014 630707.92 606268.61 217455.6234 24818.98381
2015 652738.78 647848.44 217583.5072 31849.60762
2016 677109.96 696805.5 239626.5462 39650.15505
2017 693171.2 752972.42 314570.3712 46857.56373
2018 662540.17 773429.42 337866.7306 51449.04783
2019 686220.47 851338.58 437411.6681 67284.8036
2020 767814 958760.62 520385.2692 79992.5344

In 2021, the vast majority of the country’s wealth (78.1%) belonged to the older generations with baby boomers owning a whopping 52.2% of the country’s wealth, while the silent generation owned 15.2%.

Generation X (aged between 41 and 56 years) owns 27.6%  of the country’s total wealth, while millennials (25-40 years) only possess 5% of the country’s total wealth. Hence, as a group, baby boomers are more than 10 times more wealthy than millennials.

If we look closer at the wealth distribution of millennials, it was recently revealed [4] Minnesota Reformer - Millennials are the largest workforce and the least wealthy — why? Accessed November 2021 https://minnesotareformer.com/2021/08/11/millennials-are-the-largest-workforce-and-the-least-wealthy-why-politics/ that Mark Zuckerberg, who has an estimated net worth of $97 billion, single-handedly owns 2% of all millennial wealth.  

Generation Generation wealth gap 2021
Silent generation 15.2%
Baby boomers 52.2%
Generation X 27.6%
Millennials 5%

How much real estate does each generation own? 

In 2021, the baby boomer generation owned 44.1% of all real estate in the U.S. Generation X owned 31.2%, millennials 11.2% and the silent generation 13.6%.

Generation Who owns real estate?
Silent generation 13.6%
Baby boomers 44.1%
Generation X 31.2%
Millennials 11.2%

Back in 1996, when the baby boomers were the same age as Generation X are today, they owned 41.6% of the real estate in the U.S. This is 33% more than Generation X owns in real estate today.

What baby boomers own

While baby boomers own the largest chunk of real estate compared to other generations, this is not where most of their wealth is held. Out of the baby boomers’ total wealth, 20.6% is in real estate. The largest portion (28.3%) comes from corporate equities and mutual fund shares followed by pension entitlements at 21.2%. 

Other assets account for 17.8% of their wealth, while private businesses and consumer durables account for 8.7% and 3.4% respectively. 

Generation What baby boomers own?
Corporate equities and mutual funds 28%
Pension entitlements 21.2%
Real estate 20.6%
Other assets 17.8%
Private businesses 8.7%
Consumer durables 3.4%

What millennials own

Although millennials only possess 11.2% of the nation’s total wealth relating to real estate, this is where most of their money (34.1%) is held.

Generation What baby boomers own?
Corporate equities and mutual funds 28%
Pension entitlements 21.2%
Real estate 20.6%
Other assets 17.8%
Private businesses 8.7%
Consumer durables 3.4%

Pension entitlements account for 21.8% of the millennials’ wealth, 18.1% are tied up in other assets, 9.7% in consumer durables, 8.3% in private businesses and 8% in corporate equities and mutual funds.

The value of assets: baby boomers versus millennials

If we dive deeper into the assets owned by baby boomers and millennials, we can see that there’s a significant difference in the value of the assets owned. 

The value of the total real estate owned by baby boomers is worth $14.87 trillion. The real estate owned by millennials is worth a quarter of that at $3.79 trillion. 

The difference in value of the corporate equities and mutual fund shares is even greater between the two generational groups; baby boomers own equities and funds to a total value of $20.3 trillion. millennials, on the other hand, only own $0.88 trillion in equities and funds,  meaning that baby boomers own 96% more in funds and equities than millennials.

Pension entitlements owned by baby boomers are worth $15.44 trillion compared to $2.41 trillion owned by millennials. Baby boomers’ private businesses are worth $6.26 trillion, while millennials’ private businesses are worth just 15% of that at $0.94 trillion.

Consumer durables owned by baby boomers are worth $2.41 trillion, while the consumer durables owned by millennials stack up to a value of $1.05 trillion.

Other assets owned by baby boomers are worth a total of $12.23 trillion, while millennials own $1.95 trillion worth of other assets. 

Value of assets (U.S. $ Trillions)
Baby Boomers Millenials
Real estate 14.87% 3.79%
Consumer durables 2.41% 1.05%
Corporate equities and mutual fund shares 20.37% 0.88%
Pension entitlements 15.44% 2.41%
Private businesses 6.26% 0.94%
Other assets 12.23% 1.95%

Average wealth per generation over time

Here we look at the average wealth per generation historically. To get as accurate a view as possible, we have taken inflation rates in mind. We look at the average wealth the different generations had when they were in their 30s, 40s, and 50s.

30 years of age

If we compare Generation X and millennials, we can see that millennials are 23.7% worse off than Generation X in terms of wealth accumulated around the same age. By the time Generation X was in their 30s, they had an average wealth of $84,414 (inflation rates taken into consideration), while millennials had an average wealth of $64,412.

The average baby boomer had a wealth of $132,960 in their 30s, more than double the wealth of millennials around the same age.

Year Generation Median age Wealth average per person With inflation (to 2021)
1989 Baby boomers 30s $58,698 $132,960
2005 Generation X 30s $61,540 $84,414
2020 Millennials 30s $63,523 $64,413

40 years of age

When baby boomers were in their 40s, they had an average wealth of $195,994. Generation X in their 40s, had accumulated a wealth of $131,021 around the same age.

Year Generation Median age Wealth average per person With inflation (to 2021)
1996 Baby boomers 40s $115,686 $195,994
2021 Generation X 40s $131,021 $131,021

50 years of age

When the youngest of the silent generation reached their 50s in 1996, their average wealth was $292,210. Using historical inflation rates, that number is equivalent to a wealth of $495,057 in today’s value.

Baby boomers held an average wealth of $629,683 in their 50s, equivalent to $704,158 in today’s value.

Worse off is Generation X who, on average, owned $396,293 when they started reaching their 50s. This is 43.73% less than what Boomers had when they were the same age.

Year Generation Median age Wealth average per person With inflation (to 2021)
1996 Silent generation 50s $292,210 $495,057
2014 Baby boomers 50s $629,683 $704,158
2020 Gex X 50s $396,293 $396,293

What does the future hold?

Baby boomers are considered the wealthiest generation in history but what happens when this wealth is passed on to younger generations? 

A study from Coldwell Banker [5] Coldwell Banker - A Look at Wealth 2019: Millennial Millionaires - Accessed November 2021 https://blog.coldwellbankerluxury.com/a-look-at-wealth-millennial-millionaires/ estimates that millennials are expected to inherit over $68 trillion from their predecessors by 2030, meaning that in less than 10 years’ time they will have accumulated as much as five times the wealth they currently hold.

Methodology

The population data and wealth data for the silent generation, baby boomers, Generation X and millennials is derived from the Census (www.census.gov) and the Federal Reserve (www.federalreserve.gov). At the time the research was carried out, no data was availablefor Generation Z.

The inflation rates were calculated using SmartAsset’s inflation calculator (https://smartasset.com/investing/inflation-calculator

Sources

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